PURCHASE AND SALE AGREEMENT

Transcription

1 PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT is entered into this day of November, 2008, by and between DRRAM Ashland Limited Partnership ( DRRAM ), The City of Ashland ( CITY ), and The Housing Authority of Jackson County ( HAJC ). RECITALS A. DRRAM owns certain real, personal, and intangible property commonly known or identified as 380 Clay Street, which is located in the City of Ashland, Jackson County, Oregon, as more particularly described in Section 1 and Exhibit A below (hereinafter referred to as the Clay Street Property ). B. CITY owns certain real, personal, and intangible properties commonly known or identified as: (1) three undeveloped residential Lots on Strawberry Lane and (2) the Lithia Parking Lot located mid block: between Pioneer and First Street on the south side of Lithia Way. The three Strawberry Lane Lots and Lithia Parking Lot are located in the City of Ashland, Jackson County, Oregon, and are more particularly described in Section 1 below and Exhibits B and C respectively (hereinafter collectively, referred to as the City Property ). C. CITY and HAJC jointly desire to acquire all the Clay Street Property from DRRAM, and Seller DRRAM is willing to sell, convey and exchange all the Clay Street Property to Purchasers CITY and HAJC subject to the terms of this Agreement. D. DRRAM desires to acquire all the City Property from CITY, and Seller CITY is willing to sell, convey and exchange all the City Property to Purchaser DRRAM subject to the terms of this Agreement. E. On November 4, 2008 CITY authorized this purchase, sale and land exchange at an advertised public hearing in accordance with ORS and made findings to support the exchange in accordance with ORS to F. Unless otherwise specified, for purposes of this Agreement Purchaser means DRRAM in relation to the City Property and CITY and HAJC for purposes of the Clay Street Property. Seller means DRRAM for purposes of the Clay Street Property and CITY for Purposes of the City property. AGREEMENT 1. Recitals. The recitals set forth above are true and correct and incorporated herein by this reference. 2. Purchase and Sale of the Property. Seller agrees to sell the Property to Purchaser, and Purchaser agrees to purchase the Property from Seller, on the terms and conditions set forth in this Agreement. (a) The Property consists of: (1) Clay Street Property consisting of the land described in Exhibit A attached hereto (the Land ) and all easements, rights, strips, gores, rights-of-way, and any other rights or interests appurtenant thereto, as well as all the improvements currently situated on the Land (the Improvements ). PURCHASE AND SALE AGREEMENT Page 1 of 20

2 (2) City Property Strawberry Residential Lots (three) consisting of the land described in Exhibit B attached hereto (the Land ) and all easements, rights, strips, gores, rights-of-way, and any other rights or interests appurtenant thereto, as well as all the improvements currently situated on the Land (the Improvements ). (3) City Property Lithia Parking Lot consisting of the land described in Exhibit B attached hereto (the Land ) and all easements, rights, strips, gores, rights-of-way, and any other rights or interests appurtenant thereto, as well as all the improvements currently situated on the Land (the Improvements ). (b) For purposes of this Agreement Property also means, all plans and specifications, all building permits and other permits, if any, pertaining to the construction of the Improvements, and all warranties, guaranties, and sureties now or hereafter received in connection with the construction of or equipment on the Improvements, as well as all licenses, permits, approvals, certificates of occupancy, and franchises relating to the zoning, land use, ownership, operation, occupancy, construction, or maintenance of the Improvements; 3. Purchase Price. The transaction is an exchange of the Clay Street property, currently owned by DRRAM for City property and cash. The total value or purchase price to be paid to DRRAM, that is, the value of the City property plus cash is three million six hundred eighty thousand dollars ($3,600,000.00). 4. Payment of Purchase Price. The purchase price shall be paid and shall consist of an exchange of real property and cash as set forth below. (a) DRRAM shall receive the following at closing: (1) Fee simple title to three undeveloped residential lots on Strawberry Lane, Ashland, Oregon, (Exhibit B) with an agreed upon combined fair market value of one million two hundred thousand dollars ($1,200,000); and (2) One million two hundred eighty thousand dollars cash ($1,280,000.00) (Housing Authority of Jackson County participation); and (3) Six hundred twenty thousand dollars cash ($620,000.00) from the City of Ashland; and (4) Fee simple title to the Lithia Parking Lot, (Exhibit C) consisting of approximately 7000 square feet in size, with parking and associated improvements, as is, with an agreed upon fair market value of five hundred thousand dollars ($500,000.00). (b) CITY and HAJC shall receive the following at closing: (1)Fee simple title, as tenants in common with an undivided interest in the entirety, (City 60% and HAJC 40%) to the Clay Street Property, Ashland, Oregon, (Exhibit A). 5. Inspection Contingency 5.1 Inspection Rights. Purchaser will have from the date this agreement is signed ( Effective Date ) until midnight ten (10) days before the Closing Date ( Review Period ) to satisfy itself concerning all aspects of the Property, including, without limitation, the physical condition thereof; the insurance policies, contracts, leases, and all other financial aspects of the Property; the availability of any governmental permits and approvals; and the feasibility of using PURCHASE AND SALE AGREEMENT Page 2 of 20

3 the Property for Purchaser s intended use. Purchaser will have the right to perform such tests, inspections, and feasibility studies on the Property as Purchaser may deem necessary; provided, however, that Purchaser will not conduct any environmental assessment that would require soils analysis, groundwater testing, or other studies commonly associated with a Phase II environmental site assessment without the prior written consent of Seller in each instance, which consent may be withheld or conditioned in Seller s sole discretion. Purchaser will schedule and coordinate all inspections, including, without limitation, any environmental tests, with Seller and will give Seller at least two (2) business days prior written notice thereof. Seller will be entitled to have a representative present at all times during each such inspection and communication with tenants. 5.2 Inspection Expenses. All costs and expenses of all Purchaser s tests, inspections, and studies must be paid by Purchaser when due, regardless of whether this transaction closes. 5.3 Removal of Inspection Contingencies. If, by the end of the Review Period, Purchaser has notified Seller in writing that Purchaser rejects the Property in its then-current condition, this Agreement will terminate, whereupon the Deposit, if any, will be refunded to Purchaser within five (5) days. This Agreement thereafter will be null and void, and neither party will have any obligation to the other, except as otherwise provided herein. Unless such notice of rejection is given, the inspection contingency will be deemed waived and this Agreement will be binding on Purchaser. If Purchaser elects, Purchaser may offer Seller the opportunity to correct any items Purchaser determines to be unacceptable by providing Seller with written notice of any required corrections before the end of the Review Period. 5.4 Environmental Assessments. Purchaser is responsible for obtaining its own environmental inspections of the Land and Improvements. Purchaser agrees to provide Seller with a true and complete copy of all environmental studies, tests, and reports that Purchaser obtains in connection with its inspection of the Land or Improvements and, if authorized by Seller as provided in Section 6.1, with independent sample splits of each soil or groundwater sample or other substance or material that may be obtained by Purchaser or its consultant in form and quantity sufficient for independent analysis. Purchaser will pay for all costs of its environmental inspections regardless of whether this sale closes. If any person is required to make any report to any governmental agency as the result of any environmental inspection, the report may be submitted by the Seller or the Purchaser. 6. Sale Contingency. CITY and HAJC Purchasers will have until midnight two days prior to the Closing Date in which to obtain the Purchase Price, as described in Sections 3 and 4. If, by that date, CITY and HAJC Purchasers have notified Seller in writing that the CITY and HAJC Purchasers have not satisfied this contingency, this Agreement will terminate, whereupon the Deposit, if any, will be refunded. This Agreement thereafter will be null and void and neither party will have any obligation to the other hereunder, except as otherwise provided herein. If CITY and HAJC Purchasers fail to give such notice, then the sale contingency will be deemed waived. 7. Title to the Property 7.1 Title Report. Unless otherwise provided herein, this transaction is subject to Purchaser s review and approval of a preliminary title report and the recorded covenants, conditions and restrictions ( the report and CC&Rs) showing the condition of title to the Property. Upon execution of this agreement by Seller and Purchaser, Seller will, at Seller s sole PURCHASE AND SALE AGREEMENT Page 3 of 20

4 expense, promptly order the report and CC&Rs from an Oregon title insurance company and furnish them to Purchaser. Upon receipt of the report and CC&Rs, Purchaser shall have five (5) business days within which to notify Seller, in writing of any matters disclosed in the report and CC&Rs which is/are unacceptable to Purchaser. Purchaser s failure to timely object, in writing, to any matters disclosed in the report and CC&Rs shall constitute acceptance of the report and CC&Rs. Provided, however, Purchaser s failure to timely object shall not relieve Seller of the duty to convey marketable title. If, within five (5) business days following receipt of the objections, if any, Seller fails or elects not to remove or correct the matters identified by the Purchaser, or does not give written assurances reasonably satisfactory to Purchaser that they will be removed or corrected, all earnest money, if any, shall be promptly refunded to Purchaser and this transaction shall be terminated and the agreement rescinded at the election of the Purchaser and upon written notice to Seller. This contingency is solely for Purchaser s benefit and may be waived by the Purchaser in writing. At closing, Seller shall furnish to Purchaser an owner s standard form policy of title insurance insuring marketable title in the Property to Purchaser in the amount of the purchase price, free and clear of all objections and all other title exceptions agreed to be removed as part of this transaction. The Purchaser has the right, if the Purchaser so elects, to cause the title policy to be issued as an extended coverage policy, provided the Purchaser pays the additional premiums and all survey costs associated with that coverage. If the Purchaser elects extended coverage, it shall be at Purchaser s sole cost and expense. 8. Seller s Representations 8.1 Content of Representations. Seller represents, warrants, and covenants to Purchaser as follows: (a) No Notice of Violation of Zoning and Other Laws. Seller has not received any written notice from any governmental authority alleging that the Property or Improvements violate any building codes, building or use restrictions, or zoning ordinances, rules, or regulations. (b) No Litigation. To Seller s knowledge, there is no pending or threatened litigation or administrative action with respect to the Property or Improvements. (c) No Condemnation. To Seller s knowledge, there is no pending or contemplated eminent domain, condemnation, or other governmental taking of the Property or any portion thereof. (d) No Additional Assessments. To Seller s knowledge, there are no extraordinary governmental assessments or impositions levied against, applicable to, or proposed for the Property as distinct from ordinary ad valorem property taxes, which will be disclosed in the Title Report. (e) No Government Obligations. To Seller s knowledge, there are no unperformed obligations that are currently due relative to the Property to any governmental or quasigovernmental body or authority. Seller and Purchaser acknowledge that (1) Seller DRRAM s Clay Street Property is subject a several land use approvals with conditions and permit obligations which will come with the property and may have to be amended and (2) Seller CITY s Strawberry Property is subject to modest Covenants Conditions and Restrictions negotiated with adjacent owners to avoid land use appeal for the land division. (f) No Seller Contamination. To Seller s knowledge, Seller has not caused any hazardous substance, waste, or material to be used, generated, stored, or disposed of on or transported to or from the Land or Improvements in violation of any applicable law before or PURCHASE AND SALE AGREEMENT Page 4 of 20

5 during the period in which the Seller has owned the Property. For the purposes of this paragraph, hazardous substance, waste, or material means all petroleum-based products, radon, asbestos, PCBs, and all substances, wastes, and materials that are so defined in the Comprehensive Environmental Response, Compensation, and Liability Act, 42 USC ; the Resource Conservation and Recovery Act, 42 USC k; and the Hazardous Materials Transportation Act, 49 USC (g) Authority of Seller. Seller s execution of, delivery of, and performance under this Agreement are undertaken according to authority validly and duly conferred on Seller and the signatories hereto. (h) No Breach of Agreements. This Agreement and the consummation of the transaction evidenced by this Agreement do not violate any other agreement, contract, or lease to which Seller is a party. (i) Nonforeign Status. Seller is not a foreign person as defined in IRC 1445(f)(3), and Seller is not a transferor as defined in ORS (2)(b). (j) No Tenants. There are no tenants on the Property and the property is not subject to any leases. 8.2 Survival of Warranties. All Seller s warranties in this Agreement are deemed given only as of the date of this Agreement. Seller s liability for any misrepresentation or the breach of any warranty under this Agreement will survive the closing of this transaction, but any claim for any misrepresentation or breach of any covenant will be deemed to have been waived unless Purchaser files and serves a complaint for damages or other remedies based on the alleged misrepresentation or breach within one year after the Closing Date. 9. Purchaser s Representations Purchaser represents, warrants, and covenants to Seller as follows: 9.1 Purchaser s Existence and Authority. Purchaser is a validly existing and duly organized and established legal entity and has the full right and authority to conduct its business under the laws of the state of Oregon. 9.2 No Litigation. Purchaser is not a party to any litigation or civil or criminal proceedings relevant to its ability to purchase property; no petitions in bankruptcy have been filed by or against Purchaser; and none of Purchaser s assets are currently subject to any insolvency, receivership, or foreclosure proceedings. 9.3 No Breach of Agreements. This Agreement does not breach or violate any term or provision of any other agreement or contract to which Purchaser is a party. 10. Conditions to Closing Purchaser s Conditions. (a) Necessary Approvals, Agreements and Conditions. (1) The CITY must approve the land exchange / transfer of the Strawberry Lots and the Lithia Parking Lot as part of the Purchase Price in accordance with state statutes, including pursuant to a public hearing in accordance with ORS and made findings to support the exchange in accordance with ORS to (2) The CITY and the HAJC must enter into an Intergovernmental Agreement or Memorandum of Understanding concerning the future land division of the property between the entities. The future land division will be in substantial conformity with the site layout plan, PURCHASE AND SALE AGREEMENT Page 5 of 20

6 attached as Exhibit D, which gives the HAJC approximately four (4) acres of the Clay Street Property and the CITY approximately six (6) acres of the Clay Street Property. (3) Seller s Compliance. Seller s fulfillment of each of its obligations under this Agreement in all material respects, including specifically but not limited to Title, that is at closing the Seller shall convey fee simple title to the Property by statutory warranty deed, subject only to non-delinquent real property taxes, specified items of the preliminary title report from the Preliminary Commitment, a copy of which is included in the record of this proceeding and such other matters that may be approved in writing by the Purchaser. (4) Seller s Representations: The continuing accuracy of all Seller s warranties and representations in this Agreement in all material respects. (5) Material Casualty. The absence of any material damage to the Improvements that has been caused by casualty and not repaired by the Closing Date. For the purposes of this paragraph, a material damage caused by casualty encompasses any damage by fire or other casualty that has not been repaired and paid for by the Closing Date. (6) Title Insurance. The Title Company must be ready, willing, and able to issue an extended coverage American Land Title Association owner s policy of title insurance in the amount of the Purchase Price, insuring title in Purchaser to the Premises consistent with the terms of this Agreement and subject only to the title exceptions approved or deemed approved by Purchaser Seller s Conditions. Seller s obligation to close this transaction is subject to the satisfaction of each of the following conditions: (a) Purchaser s Compliance. Purchaser s fulfillment of each of its obligations under this Agreement. (b) Purchaser s Representations: The continuing accuracy of all Purchaser s warranties and representations in this Agreement. 11. Closing Time is of the Essence. Closing shall occur on a date mutually agreed upon by Seller and Purchaser, but in no event later than December 31, The terms closed, closing or closing date shall mean when the deed or contract is recorded, a title insurance policy is ready to be issued, and the Purchase Price is made available to Seller. Seller and Purchaser acknowledge that for closing to occur by the Closing Deadline, it may be necessary to execute documents and acquire the Purchase Price, as described in Section 3, prior to that date Deliveries at Closing (a) On or before the Closing Date, the Seller shall deliver the following: (1) Deed. A statutory warranty deed duly executed and acknowledged in recordable form by the Seller, conveying the Property to the Purchaser subject only to non-delinquent property taxes, specified exceptions to the Preliminary Commitment, and other matters that may be approved in writing by the Purchaser. (2) Bill of Sale. A bill of sale, duly executed and acknowledged by the Seller in favor of the Purchaser, assigning and conveying to the Purchaser all of the Seller s right, title, and interest in and to the improvements, and personal property, if any, used in connection with the operation of the Property, free and clear of all liens, encumbrances, and adverse claims. (3) Assignment of Leases. There are no leases existing and the Parties agree not to enter into any leases impacting the Property. If leases are discovered, an assignment of leases, if any, duly executed and acknowledged by the Seller in recordable form, assigning to the PURCHASE AND SALE AGREEMENT Page 6 of 20

7 Purchaser, all of the Seller s right, title, and interest in and to all the tenant leases and tenant deposits. (4) General Assignment. An assignment, duly executed by the Seller, assigning to the Purchaser all of the Seller s right, title, and interest in and to all service contracts accepted by the Purchaser and all other intangible property constituting part of the property being sold. (5) Non-foreign Certification. The Seller represents and warrants that it is not a foreign person as defined in IRC The Seller will give an affidavit to the Purchaser to this effect in the form required by that statute and related regulations. (6) Tenant Notification Letter. There are no tenants and the parties agree not to rent or lease the premises. In the event leases are discovered, a letter to tenants, duly executed by the Seller and dated as of the Closing Date, satisfactory in form and substance to the Purchaser, notifying each tenant that: A. The Property has been sold to the Purchaser; B. All of the Seller s right, title, and interest in and to the tenant leases and tenant deposits have been assigned to the Purchaser; and C. Commencing immediately, all rent and other payments and any notices under tenant leases are to be paid and sent to the Purchaser. (7) Changes of Address. Written notices executed by the Seller to taxing authorities having jurisdiction over the Property, changing the address for service of notice and delivery of statements and bills. (8) Proof of Authority. Such proof of the Seller s authority and authorization to enter into this Agreement and consummate the transaction contemplated by it, and such proof of the power and authority of the persons executing and/or delivering any instruments, documents, or certificates on behalf of the Seller to act for and bind the Seller, as may be reasonably required by the Purchaser. (9) Lien Affidavits. Any lien affidavits or mechanic s lien indemnifications as may be reasonably requested by the Title Company in order to issue the title policy. (10) Proration s. The amount due, specifically taxes, including deferred taxes, if any, after the proration s are computed in accordance with the following: (a) General. Rental, revenues, and other income, if any, from the Property and presently existing taxes, assessments, improvement bonds, and other expenses, if any, affecting the Property, shall be prorated as of the day following the Closing Date. For the purpose of calculating prorations, the Purchaser shall be deemed to be in title to the Property and, therefore, entitled to the income and responsibility for the expenses for the entire day following the Closing Date. Closing will not occur unless all presently existing taxes including deferred taxes have been paid or submitted at the time of closing. (b) Method of Proration. All prorations shall be made in accordance with customary practice in Jackson County, Oregon, except as expressly provided herein. The Purchaser and the Seller agree to cause their accountants to prepare a schedule of tentative prorations before the Closing Date. Such proration s, if and to the extent known and agreed on as of the Closing Date, shall be paid by the Purchaser to the Seller (if the proration s result in a net credit to the Seller) or by the Seller to the Purchaser (if the proration s result in a net credit to the Purchaser) by increasing or reducing the cash to be paid by the Purchaser at closing. Any such proration s not determined or not agreed on as of the Closing Date shall be paid by the Purchaser to the Seller, or by the Seller to the Purchaser, as the case may be, in cash as soon as practicable following the Closing Date. PURCHASE AND SALE AGREEMENT Page 7 of 20

8 (b) On or before the Closing Date, the Purchaser shall deliver the following to tine Seller: (1) Purchase Price. The purchase price in accordance with this Agreement, including specifically Sections 2-4 above. (2) General Assignment. The general assignment duly executed by the Purchaser Title Insurance. As soon as possible after the Closing Date, the Escrow Agent will furnish Purchaser a standard American Land Title Association form of owner s policy of title insurance in the amount of the purchase price for the Property, subject only to the Escrow Agent s standard preprinted exceptions and exclusions for the form and except for the matters accepted or deemed accepted by Purchaser under this Agreement. The costs of additional or extended title insurance beyond standard coverage will be paid by Purchaser, and the availability of any such coverage will not be a condition of closing Possession. Seller will deliver possession of the Property to Purchaser on the Closing Date Acceptance of Property. Purchaser acknowledges that Purchaser has assessed, or has had the opportunity to assess, the size, configuration, utility service, environmentally sensitive areas, means of access, permitted uses, status of title, value, condition, and all other material aspects of the Property, and, except as specifically stated herein, Purchaser is not relying on, nor has Purchaser been influenced by, any statement or representation of Seller or any agent or representative of Seller regarding any of such items. Except for any actionable breaches of Seller s representations and warranties contained herein, Purchaser s acceptance of the Property and the satisfaction or waiver of all Purchaser s conditions to closing will be evidenced solely by the closing of this transaction and without any other act or confirmation by Purchaser. Purchaser does not have the option to close this transaction without accepting the Property in its then current condition, and Purchaser acknowledges that except for any Seller s breach of an express warranty stated in this Agreement, Purchaser is acquiring the Property AS IS, WHERE IS in its current condition existing as of the Closing Date, without any representation or warranty of any kind or nature by Seller Indemnification. Seller will defend, indemnify, and hold harmless Purchaser from and against all third-party claims for premises liability regarding any injury or damage to the third party or its property that occurred on or about the Property before the Closing Date. 12. Defaults and Failure to Close 12.1 Seller s Remedies. In the event that this transaction fails to close on account of a default by Purchaser under this Agreement, the Deposit, if any, will be forfeited by Purchaser and retained by Seller as liquidated damages as Seller s sole remedy for the default. SUCH AMOUNT HAS BEEN AGREED BY THE PARTIES TO BE REASONABLE COMPENSATION AND THE EXCLUSIVE REMEDY FOR PURCHASER S DEFAULT, SINCE THE PRECISE AMOUNT OF SUCH COMPENSATION WOULD BE DIFFICULT TO DETERMINE Purchaser s Remedies. If this transaction fails to close on account of a default by Seller under this Agreement, Purchaser will be entitled to any remedies for breach of contract that may be available under applicable law, including without limitation the remedy of specific performance and the right to recover its actual and consequential damages. PURCHASE AND SALE AGREEMENT Page 8 of 20

9 12.3 Defaults. Except for either party s wrongful failure to close or satisfy a condition to closing by the required Closing Date, neither party will be deemed in default under this Agreement unless the party is given written notice of its failure to comply with this Agreement and the failure continues for a period of twenty (20) days after the date the notice is given. This section will not be construed as extending the time by which any notice or contingency waiver must be given Costs and Attorney Fees. If suit, action, arbitration, or mediation is instituted to interpret or enforce the terms of this Agreement or with respect to any dispute under this Agreement, the prevailing party is entitled to recover from the other party the sum that the court, arbitrator, or mediator may adjudge reasonable as costs and expert witness and attorney fees in any such proceeding, at trial, on any appeal or petition for review, and in any bankruptcy proceeding (including the adjudication of any issues peculiar to bankruptcy law), in addition to all other sums provided by law Waiver of Jury Trial. AS PART OF THE CONSIDERATION FOR THIS AGREEMENT, EACH OF THE PARTIES HERETO WAIVES THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE OR ACTION UNDER THIS AGREEMENT. 13. Conduct of Business 13.1 Operations. Between the date of this Agreement and the Closing Date, Seller will continue to manage the Property in accordance with its current practices, and Seller will not take any steps or actions that it knows would be materially detrimental to the value of the Property Contracts. Between the Effective Date and the Closing Date, DRRAM Seller will not enter into any equipment purchase contract that will not be paid in full before the Closing Date or any service or maintenance contract that cannot be canceled upon thirty (30) days notice at no cost to Purchaser unless Seller first obtains the written approval of Purchaser, which approval will not be unreasonably delayed, conditioned, or withheld Insurance. Seller agrees to continue to maintain its current casualty and liability insurance policies on the Property until the Closing Date but has no responsibility for maintaining any such insurance after the Closing Date or to assign any policy to Purchaser Property Maintenance. Between the date of this Agreement and the Closing Date, Seller agrees to maintain and make ordinary repairs to the Property so as to cause the Property to be delivered to Purchaser in substantially the same condition existing as of the end of the Review Period, ordinary wear and tear, damage by casualty, and damage by condemnation excepted. Each party will promptly notify the other regarding any item of repair, replacement, or maintenance of which it becomes aware and that requires an expenditure in excess of one thousand dollars ($ ). In no event will Seller be required to make any capital repairs or replacements to the Property between the Effective Date and the Closing Date No Additional Obligations. Except as provided in this section, Seller has no obligation to maintain, repair, alter, reconstruct, or replace any portion of the Property or preserve or enter into any existing or new leases or service contracts, and Purchaser acknowledges that there exist no express or implied representations or covenants to do so. 14. Legal Relationships 14.1 Relationship of Parties. This Agreement creates only the relationship of Seller and Purchaser, and no joint venture, partnership, or other joint undertaking is intended hereby. PURCHASE AND SALE AGREEMENT Page 9 of 20

10 Neither party hereto will have any rights to make any representations or incur any obligations on behalf of the other. Neither party has authorized any agent to make any representations, admit any liability, or undertake any obligation on its behalf. Neither party is executing this Agreement on behalf of an undisclosed principal No Third-Party Beneficiaries. No third party is intended to be benefited or afforded any legal rights under or by virtue of this Agreement Joint and Several Liability. As regards CITY and HAJC, the division of any liability shall be 60% City and 40% HAJC and shall not be joint and several. If any other party comprises more than one person or entity, the obligations of each person or entity comprising such party under this Agreement will be joint and several Indemnified Parties. Any indemnification contained in this Agreement for the benefit of a party will extend to the party s members, directors, shareholders, officers, employees, and agents Assignments and Successors. Purchaser may not assign or otherwise transfer this Agreement or any interest herein, voluntarily, involuntarily, or by operation of law, without the prior written consent of Seller in each instance consent will not be unreasonably withheld. Purchaser will not be released from its obligations under this Agreement in the event of any assignment or transfer by Purchaser. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties hereto and their respective successors and assigns. 15. General Provisions 15.1 Notices. Notices under this Agreement must be in writing and, if personally delivered or sent by facsimile, will be effective when received. If mailed, a notice will be deemed effective on the second day after deposited as registered or certified mail, postage prepaid, directed to the other party. Notices must be delivered, mailed, or sent by facsimile to the following addresses and telephone numbers: DRRAM: Attn: Facsimile No.: - - with a copy to: Attn: Facsimile No.: - - CITY: City of Ashland 20 E. Main St. Ashland, OR Attn: Martha Bennett, City Administrator Facsimile No.: with a copy to: Richard Appicello, City Attorney PURCHASE AND SALE AGREEMENT Page 10 of 20

11 20 E. Main St. Ashland, OR Facsimile No.: HAJC : The Housing Authority of Jackson County Attn: Facsimile No.: - - with a copy to: Attn: Facsimile No.: - - Either party may change its address for notices by giving at least fifteen (15) days advance written notice to the other Time of Essence. Except as otherwise specifically provided in this Agreement, time is of the essence for each and every provision of this Agreement Invalidity of Provisions. If any provision of this Agreement, or any instrument to be delivered by Purchaser at closing under this Agreement, is declared invalid or is unenforceable for any reason, the provision will be deleted from the document and will not invalidate any other provision contained in the document Neutral Construction. This Agreement has been negotiated with each party having the opportunity to consult with legal counsel and will be construed without regard to which party drafted all or part of this Agreement Captions. The captions of the sections and paragraphs in this Agreement are used solely for convenience and are not intended to limit or otherwise modify the provisions of this Agreement Waiver. The failure of either party at any time to require performance of any provision of this Agreement will not limit the party s right to enforce the provision. Waiver of any breach of any provision will not be a waiver of any succeeding breach of the provision or a waiver of the provision itself or any other provision Subsequent Modifications. This Agreement and any of its terms may be changed, waived, discharged, or terminated only by a written instrument signed by the party against whom enforcement of the change, waiver, discharge, or termination is sought Saturdays, Sundays, and Legal Holidays. If the time for performance of any of the terms, conditions, and provisions hereof falls on a Saturday, Sunday, or legal holiday, then the time of the performance will be extended to the next business day thereafter Venue. In any action brought to interpret or enforce any of the provisions of this Agreement, the venue will be in Jackson County, Oregon Applicable Law. This Agreement will be construed, applied, and enforced in accordance with the laws of the state of Oregon. All sums referred to in this Agreement will be calculated by and payable in the lawful currency of the United States. PURCHASE AND SALE AGREEMENT Page 11 of 20

12 15.11 Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the Property and supersedes and replaces all written and oral agreements previously made or existing between the parties No Offer. By providing an unexecuted copy of this Agreement to any person, neither party is deemed to have made an offer to sell or purchase or otherwise indicated its willingness to enter into any transaction with respect to the Property, and this Agreement will not be binding on any party unless and until it has been fully executed and delivered by Seller and Purchaser No Recording. Neither this Agreement nor any memorandum or short form thereof may be recorded Counterparts. This Agreement may be executed simultaneously or in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same contract Facsimile Copies. Either party may rely on facsimile copies of this Agreement to the same extent as the originals Statutory Warning (ORS (2)). THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS THAT, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND THAT LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS , IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON S RIGHTS, IF ANY, UNDER ORS , AND TO AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS OR , TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO VERIFY THE EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS , AND TO AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS [THE PROPERTY DESCRIBED IN THIS INSTRUMENT IS SUBJECT TO SPECIAL ASSESSMENT UNDER ORS ORS REQUIRES NOTIFICATION TO THE STATE HISTORIC PRESERVATION OFFICER OF SALE OR TRANSFER OF THIS PROPERTY.] IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written. DRRAM: By: PURCHASE AND SALE AGREEMENT Page 12 of 20

13 Printed Name: Its: Date Executed: CITY: HAJC: By: Printed Name: Its: Date Executed: By: Printed Name: Its: Date Executed: PURCHASE AND SALE AGREEMENT Page 13 of 20

14 STATE OF OREGON ) ) ss County of Jackson ) The foregoing instrument was acknowledged before me this day of, 2008, by, as the Member and authorized agent of DRRAM Ashland Limited Partnership. Notary Public for Oregon My Commission Expires: Approved as to Form: OSB Attorney for DRRAM STATE OF OREGON ) ) ss County of Jackson ) The foregoing instrument was acknowledged before me this day of, 2008, by John Morrison, as the Mayor and authorized agent of the City of Ashland, Oregon, on behalf of said City. Approved as to Form: Notary Public for Oregon My Commission Expires: Richard Appicello, OSB City Attorney STATE OF OREGON ) ) ss County of Jackson ) The foregoing instrument was acknowledged before me this day of, 2008, by, as the authorized agent of the Housing Authority of Jackson County, on behalf of said Authority. Notary Public for Oregon My Commission Expires: Approved as to Form: OSB Attorney for DRRAM PURCHASE AND SALE AGREEMENT Page 14 of 20

15 EXHIBIT A Description of Clay Street Property Beginning at a point on line between the Southeast Quarter of the Southwest Quarter, and the Southwest Quarter of the Southwest Quarter of Section 11, Township 39 South, Range 1 East of the W.M., Jackson County, Oregon, 9.95 chains North of the Southeast corner of the Southwest Quarter of the Southwest Quarter of said Section 11, thence North along said line, 9.95 chains, thence North West chains; thence South 9.95 chains, thence South East chains to the point of beginning. (Map No. 391E11C, Tax Lot Account No , Code 5-08) PURCHASE AND SALE AGREEMENT Page 15 of 20

16 EXHIBIT B Description of City Property Three Strawberry Residential Properties PURCHASE AND SALE AGREEMENT Page 16 of 20

17 EXHIBIT C Description of City Property Lithia Parking Lot Property PURCHASE AND SALE AGREEMENT Page 17 of 20

18 EXHIBIT D Site Layout for 380 Clay Street PURCHASE AND SALE AGREEMENT Page 18 of 20

19 EXHIBIT E List of Property Documents 1. Real estate tax statements for the past three years and any correspondence with local assessors in Seller s possession. 2. List of all significant recurring services costing an average of more than $1,000 per month (include vendor, cost, and frequency). 3. Any environmental assessments or audits of the Property that are in Seller s possession or under Seller s control. 4. Any engineering reports or studies of the Property that are in Seller s possession or under Seller s control. PURCHASE AND SALE AGREEMENT Page 19 of 20

20 EXHIBIT F Statutory Warranty Deeds F-1 Clay Street F-2 Strawberry Lots F-3 Lithia Parking Lot [Form of Applicable Deed] PURCHASE AND SALE AGREEMENT Page 20 of 20

21 Real Property Exchange Findings BEFORE THE CITY COUNCIL CITY OF ASHLAND, JACKSON COUNTY, OREGON November 4, 2008 IN THE MATTER OF A REAL PROPERTY ) FINDINGS OF FACT EXCHANGE OF APPROXIMATELY 1.71 ACRES ) CONCLUSIONS OF LAW OF CITY PROPERTY FOR 4.72 ACRES OF A 10 ) AND ORDER ACRE PRIVATE PROPERTY PURSUANT TO ) ORS AND PUBLIC HEARING ) PROCEEDURES IN ORS ) APPLICANT: City of Ashland ) I. NATURE OF PROCEEDINGS This matter comes before the City Council for the City of Ashland for a public hearing concerning a real property exchange pursuant to statutory notice and hearing requirements of ORS On November 4, 2008, the Ashland City Council, at the City Council Chambers at 1175 East Main Street conducted an advertised public hearing on a proposed real property exchange pursuant to ORS ORS The nature of the land exchange, including appraisal and other evidence of market value were fully disclosed in the staff report and supporting documents entered into the record at the public hearing. At such Public Hearing the City Council received written and oral testimony from interested parties on the question of the land exchange. Based upon the evidence in the record, the City Council for the City of Ashland makes the following findings of fact and conclusions of law: II. FINDINGS OF FACT 1) The Nature of Proceedings set forth above are true and correct and are incorporated herein by this reference. 2) The City property subject to the real property exchange consists of three separate parcels of City-owned property comprising approximately 1.71 acres of property. These City-owned properties include a 1.05 acre property located on Westwood (39 1E 08BD Tax Lot 102), a 0.5 acre property located on property Strawberry Lane (39 1E 08BD Tax Lot 104) and a 0.16 acre property on Lithia Way (39 1E 09AB Tax Lot ). The legal description and drawings of each of the City properties is more fully set forth in the record of this proceeding and incorporated herein by this reference. 3) The private property subject to the real property exchange consists of approximately 4.72 acres of a 10 acre property located at 380 Clay Street (39 1E 11C Tax Lot 2500). The owner of the private property is Page 1

22 DRRAM Ashland LP. This property appears on City s Parks, Trails and Open Space Master Plan Map (a part of City s Comprehensive Plan) as Short-Term Acquisition Area 3". The legal description and drawings of the DDRAM property is more fully set forth in the record of this proceeding and incorporated herein by this reference. In addition to this real property, the City and the Housing Authority of Jackson County will purchase the remaining 5.28 acres of the original 10 Acre property. This additional land area is not included in the valuation of this exchange. 4) The approximately 4.72 acres of property received by the City in exchange for the City property will be used for the development of affordable housing, public streets, active athletic fields, passive recreation, and public open space including the enhancement of significant wetlands located on the property. The reasons stated for City Council consideration for the exchange include but are not limited to the support of the development of affordable housing and the added value to the City s Park s system. III. FINDINGS APPLYING APPLICABLE STATUTORY CRITERIA 1) The Council finds and determines that the relevant statutory criteria to find property eligible for a real property exchange involving City property are found in or referenced in ORS ORS as well as ORS ) The Council finds that it has received all information necessary to make a decision based on the Staff Report, public hearing testimony and the exhibits and evidence received. 3) The Council finds and determines that this proposal to exchange real property meets all applicable statutory minimum criteria for eligibility to exchange real property, as more fully set forth herein. Further the City Council finds and determines that the proposed disposition of real property in the real property exchange is deemed necessary or convenient to the City, and furthers the public interest. This finding is supported by competent substantial evidence in the whole record as well as the detailed findings set forth herein and incorporated herein by this reference. Minimum Criterion for Eligibility for Real Property Exchange 4) [ORS ], [ORS ] & [ORS ] ORS Transfer or lease of real property owned or controlled by political subdivision; procedure in case of qualified title. (1) Except as provided in subsection (2) of this section, whenever any political subdivision possesses or controls real property not needed for public use, or whenever the public interest may be furthered, a political subdivision may sell, exchange, convey or lease for any period not exceeding 99 years all or any part of their interest in the property to a governmental body or private individual or corporation. The consideration for the transfer or lease may be cash or real property, or both. *** Real Property Exchange Findings Page 2

23 (3) Unless the governing body of a political subdivision determines under subsection (1) of this section that the public interest may be furthered, real property needed for public use by any political subdivision owning or controlling the property shall not be sold, exchanged, leased or conveyed under the authority of ORS to , except that it may be exchanged for property which is of equal or superior useful value for public use. Any such property not immediately needed for public use may be leased if, in the discretion of the governing body having control of the property, it will not be needed for public use within the period of the lease. ORS Property valuation in exchange to be equal. When property is exchanged under the authority of ORS to , the value of the real property accepted by the political subdivision in exchange for any of its property plus cash, if any, shall not be less than the value of the property relinquished. ORS Determining valuation of property in exchanges. The value of the respective properties proposed to be exchanged shall be determined by the governing body of the political subdivision. The governing body shall cause it to be appraised by one or more competent and experienced appraisers. The compensation, if any, of the appraisers shall be borne equally by the respective owners of the property. In case the valuation shall not be mutually satisfactory to the respective owners it shall not be binding upon them. The statutory requirements are summarized herein: In order to sell, convey or exchange real property, ORS (1) (3) requires that the Council find either that the property is not needed for public use or that the public interest may be furthered. ORS (3) also requires that unless there is a finding the public interest may be furthered, if the property is needed for public use, that property may only be exchanged if the property received is of equal or superior useful value for public use.. ORS clearly established that the monetary value of real property accepted by the City must not have a monetary value less than the value of the property relinquished. The valuation must be established by the City pursuant to ORS based on appraisals. Pursuant to ORS , the City Council finds and determines that the public interest will be furthered by the exchange of the City Property previously and currently utilized as a public parking lot on Lithia Way, and the 1.55 acres of undeveloped property City Property on Strawberry Lane and Westwood Street. The DRRAM Ashland LP Property appears on City s Parks, Trails and Open Space Master Plan Map (a part of City s Comprehensive Plan) as Short-Term Acquisition Area 3". The real property exchange in addition to a cash contribution from the Housing Authority of Jackson County and the City, allows acquisition of a ten acre parcel of property (DDRAM Property) identified on City s adopted Parks, Trails, and Open Space Master Plan s short term acquisition list. Acquisition by City of the DRRAM Ashland LP property also provides City with the opportunity to work in partnership with the Housing Authority of Jackson County and other affordable housing providers to develop approximately 78 needed affordable housing units in furtherance of meeting the City s low-income and workforce housing needs. The real property exchange also provides the Real Property Exchange Findings Page 3

24 public with improved access to the existing City-owned YMCA park from the Clay Street public right of way. Further, acquisition of the DRRAM Ashland LP Property provides City with an opportunity to benefit the community by preserving and enhancing the approximate one-acre of significant wetlands adjacent to Clay Street. The 1.55 acres of City Property on Strawberry Lane and Westwood Street to be exchanged herein is currently zoned to accommodate three single family homes on ½ acre lots, and presently serves no public purpose. The 0.16 acre City property located on Lithia Way to be exchanged herein is presently used as a public parking lot providing thirteen 4hr parking spaces within Ashland s downtown. Because the 0.16 acre City Property on Lithia Way to be exchanged currently provides public parking, the City cannot find that the property is not necessary for public use. Concerning the monetary value of the exchange, the City Council finds and determines that consistent with ORS In July 2007, the City of Ashland received a Report reflecting an Appraised Value of the 10 acre DRRAM Ashland LP Property conducted by Glen Tiffany MAI, Advanced Appraisal Technology, State Certified Appraiser # C (Exhibit 1). This Appraisal Report was commissioned by DRRAM Ashland LP, with the appraisal cost borne by DRRAM Ashland LP. In June of 2008 the City commissioned a second appraisal to inform the determination of value for the DRRAM Ashland LP property and received an Appraisal Report from Christine M. Pellett, MAI, Real Estate Appraiser and Consultant, State Certified Appraiser # C000194, with the appraisal cost borne by the City of Ashland (Exhibit 2). In consideration of these two separate appraisals utilized in determining the value of the DRRAM Ashland LP property the cumulative cost of appraisals was borne equally by the City and DRRAM Ashland LP. Independent of the proposed exchange the City commissioned appraisal reports to determine the fair market value of the respective real properties owned by the City, which are now to be exchanged, from a qualified licensed appraiser with experience in similar real estate appraisals. In June 2008 the City received Appraisal Reports conducted by Christine M Pellett, MAI and commissioned by the City reflecting the Value of the Cityowned properties including the 0.16 acre Lithia Way property and the 1.05 acre property on Westwood Street (Exhibit 3). In October 2006 the City commissioned an appraisal by Kathlessn Mackris, Mackris Appraisal Services, State Certified Appraiser # L000526, to establish the market value of the 0.5acre City-owned property on Strawberry Lane (Exhibit 4). The Council finds and determines that the appraisers were competent and experienced. The respective Appraisal Reports, for the DRRAM Ashland LP and the City Properties are included in the record and incorporated herein by reference. The Appraisal Reports and supporting documents were made available to the public prior to the public hearings before b City Council. The City Council is charged with the determination of the value of the exchanged properties pursuant to ORS Based upon the appraisal documents, the City Council finds and determines that the City Property to be conveyed to DRRAM Ashland LP is less than the monetary value of the DRRAM Ashland LP Property to be conveyed to the City in connection with said real property exchange, as reflected in attached Exhibit 1, Exhibit 2, Exhibit 3, and Exhibit 4 in the record, incorporated herein by reference. Pursuant to ORS , Real Property Exchange Findings Page 4